Large technology companies rarely say “we fired you because it was cheaper or more convenient.” Instead, they rely on a familiar set of narratives—performance, calibration, business necessity, or future potential. These explanations are often presented as neutral, data-driven, and unavoidable.

​

In practice, they are frequently pretext.

​

Understanding how Big Tech frames terminations—and when those justifications cross the line into illegality—is critical for employees navigating a sudden layoff, especially one branded as “performance-based.”

​

The Most Common Justifications Big Tech Uses

1. “Performance-Based” Layoffs

​

Companies often claim that layoffs are based on performance rather than cost-cutting. This framing serves two purposes:

​

• It avoids WARN Act scrutiny and reputational fallout.

• It stigmatizes terminated workers, discouraging legal challenges and weakening future job prospects.

 

But courts look beyond labels. If employees with long histories of strong reviews, promotions, bonuses, or recent positive performance signals are suddenly deemed “low performers,” that inconsistency matters.

​

Key red flags include:

​

• No prior negative feedback before termination

• Mid-year reviews indicating employees were “meeting” or “exceeding” expectations

• Performance critiques that appear only after protected leave, disability disclosure, pregnancy, or complaints

​

2. Calibration and Forced Ranking

​

Many tech companies use “calibration” to justify terminations—group discussions where managers are pressured to identify a fixed percentage of employees to downgrade or exit.

​

While calibration itself is not unlawful, it becomes problematic when:

​

• A predetermined quota requires managers to label someone a low performer regardless of evidence

• Subjective criteria like “future potential,” “tone,” or “resilience” override objective metrics

• Employees on leave, returning from leave, or requesting accommodations are disproportionately selected

• Forced ranking systems have long been associated with discriminatory outcomes, particularly against caregivers, disabled employees, and those who speak up.

​

3. “Business Needs” and “Reorganization”

​

Another common justification is that a role was eliminated due to restructuring. This can be lawful—but only if it is genuine.

​

Warning signs of pretext include:

​

• The same work continuing under a different title

• A younger, male, or non-disabled employee absorbing the role

• Reorganizations announced shortly after protected activity (leave, complaints, accommodation requests)

• Courts routinely reject “business needs” explanations when timing and facts don’t align.

​

When a Layoff Is Actually Unlawful

​

A termination labeled as a layoff may violate the law when it is motivated—fully or partially—by a protected characteristic or activity.

​

Common Legal Violations in Tech Layoffs

​

• FMLA violations: Taking medical, parental, or caregiving leave cannot be used as a negative factor in termination decisions.

• Disability discrimination (ADA / state law): Penalizing employees for symptoms, accommodations, or medical absences is unlawful.

• Pregnancy discrimination: Performance standards cannot be raised or redefined because an employee is pregnant or taking maternity leave.

• Retaliation: Employees cannot be targeted for raising concerns about discrimination, bias, or unlawful practices.

• Defamation: Publicly branding employees as “low performers” when that claim is false can expose companies to liability.

 

Importantly, mixed motives still violate the law. Even if cost savings or restructuring played a role, discrimination need only be a motivating factor.

​

How Employers Use “Performance” to Mask Protected Leave

​

One recurring tactic in Big Tech layoffs is using volume-based metrics (“impact,” “output,” “velocity”) to penalize employees who were on protected leave.

​

This is unlawful.

​

Employers may not:

​

• Compare employees who took protected leave to those who worked the full year

• Downgrade ratings due to time not worked during protected leave

• Require employees to “make up” for taking protected leave by exceeding normal expectations

 

Courts have repeatedly held that neutral-sounding metrics become discriminatory when they penalize legally protected absences.

​

Equity Clawbacks and Lost Unvested Shares

How Companies Structure Equity to Keep It

​

Tech compensation is intentionally designed so that a large portion of pay comes from equity that vests over time. When an employee is terminated—even unlawfully—companies typically:

​

• Immediately stop vesting

• Forfeit unvested RSUs

• Rely on plan language stating vesting ends upon termination for any reason

​

This can result in losses of hundreds of thousands or millions of dollars per employee.

​

When Lost Equity Can Be Recovered

​

Although equity plans are written to favor employers, lost unvested shares may be recoverable when:

​

• The termination itself was unlawful

• The employee was managed out to avoid vesting

• Performance justifications were pretextual

• Leave or disability was used as a negative factor

 

Courts and arbitrators often treat lost equity as compensatory damages, not speculative future pay, particularly where vesting was imminent or highly likely absent the unlawful termination.

​

Why “At-Will Employment” Is Not a Shield

​

Employers often rely on “at-will employment” language to suggest they can terminate for any reason.

That is false.

​

At-will employment does not permit termination:

​

• Because of disability, pregnancy, race, gender, age, or sexual orientation

• Because an employee took protected leave

• Because an employee complained about discrimination or retaliation

​

At-will simply means there is no contract guaranteeing continued employment—not that the law disappears.

​

What Employees Should Do Immediately After a Suspect Layoff

​

If you were terminated in a so-called performance-based layoff:

​

• Preserve evidence

• Save performance reviews, emails, Slack messages, calibration notes, and offer letters.

• Document timelines

• Note when you disclosed a condition, took leave, complained, or requested accommodation.

• Do not assume equity is gone forever

• Lost RSUs are often one of the largest components of damages.

• Be cautious in self-descriptions

• Avoid repeating the employer’s “low performer” narrative when job hunting.

• Speak with counsel early

 

Delay can mean lost evidence, waived rights, or missed deadlines.

​

The Bottom Line

​

In Big Tech, layoffs are often framed as neutral exercises in performance management. But when those narratives collapse under scrutiny, they reveal a different reality: discrimination or retaliation dressed up as pretext.

​

Understanding the patterns companies use—and the legal limits they cannot cross—is the first step toward protecting both your career and your compensation.